Two times more, according to a Dow Jones-sponsored study by CEG Worldwide. "Real" wealth managers blow "traditional" financial advisors out of the water in terms of client assets and income, according to a new study sponsored by Dow Jones.

On average, advisors with rigorously consultative approaches -- backed by repeatable and scalable processes -- and who make a point of nurturing client relationships control twice the client assets and pull in three times as much in annual income as "investment generalists."

Substance

"A defined process and a high level of client communication differentiate the highly successful group of wealth managers," says Simon Alterman, head of strategy and business development at Dow Jones' Enterprise Media group. "By understanding their clients' their investment and personal interests, wealth managers provide the customized service clients require. As a result, [their clients] entrust them with a larger percentage of their assets and provide more referrals for new high-net-worth clients."

The study Best Practices of Elite Advisors: The Wealth Management Edge, says that wealth managers control an average of $645 million in client assets; generalists manage $308 million. Wealth managers have an average net annual income of $881,000; generalists take home $279,000 on average.

Only 6.6% of the financial advisors surveyed use the consultative approach that Dow Jones says defines a wealth manager; no less than 42.5% of those the media company view as investment generalists described themselves as wealth managers.

"For all of the talk and promotion focused on wealth management, we found that only a small portion of the financial-advisory industry is practicing true wealth management," says John Bowen, CEO of CEG Worldwide, which conducted the survey underlying the Dow Jones study. "But for those who do, the benefits are tremendous."

For the study, CEG polled nearly 2,100 U.S.-based financial advisors with at least $50 million in assets under administration and five years of experience.

The comparatively small number of "wealth managers" polled contact their top clients three times more frequently than their generalist counterparts -- on average 15.4 times a year. In addition, 87.7% of wealth managers cite client referrals and 81.9% cite professional referrals as sources for new clients compared with 78.9% and 26.2%, respectively, for investment generalists. Findings from wealth-management practitioners show that 85.5% of them engage in a formal review process with clients, 81.9% provide clients with formal plans and 76.8% provide clients with written analyses of their situations.

You can get a copy of the study with this online form. -FWR

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